After Week of Debate, House Passes Bailout Plan

October 3, 2008 at 6:05 PM EDT

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Members of the House approved a modified federal rescue plan Friday, moved by the Senate's support and mounting concerns over the stability of the U.S. financial sector. Kwame Holman reports on the bill's passage.

REP. DAVID DREIER (R), California: For the second time this week, this body will consider a plan to unclog our banking system and unfreeze our credit markets.

KWAME HOLMAN: The sense of deja vu on the House floor today was infused with caution. Supporters of the economic bailout bill knew that over-confidence contributed to the bill’s shocking failure on Monday.

Now, buttressed by a three-fourths majority vote for the bill in the Senate on Wednesday, members prepared to re-vote the bill that has as its centerpiece the unprecedented authorization for the U.S. Treasury to buy up to $700 billion worth of tainted mortgage-backed securities.

Most of the no votes on Monday came from Republicans. Today, their leader, John Boehner of Ohio, said even passing the bill this time would not be a cure-all for a worsening economy.

REP. JOHN BOEHNER (R-OH), House Minority Leader: We’re in the midst of a recession. It’s going to be a rough ride, but it will be a whole lot rougher ride if we don’t pass this bill.

But I will say to all of you, when this bill passes today, remember those words, “In God we trust,” because we’re going to need his help.

Lawmakers approve the bailout

KWAME HOLMAN: On the heels of the House's surprising rejection of the financial rescue plan Monday, U.S. markets deflated. Credit markets squeezed tighter. And the stock market temporarily lost $1.2 trillion in value.

Over the next four days, those realties were not lost on members' constituents back home, nor on members themselves.

Democrat Jerrold Nadler's district includes Wall Street.

REP. JERROLD NADLER (D), New York: Now we face a very real crisis. The credit markets are shutting down. People will not be able to get car loans, loans for store inventories. There will be thousands of bank failures, millions of job losses.

This is the only bill that can be agreed upon now. We're not sure this bill will solve the crisis, but it might.

KWAME HOLMAN: More than 220 Republicans and Democrats voted no on Monday to leave the bailout 12 votes short of passage. By today, many of them had changed their minds, having noted a different economic and political landscape, said Majority Leader Steny Hoyer.

REP. STENY HOYER (D-MD), House Majority Leader: Some were convinced when a vote in this chamber led to the evaporation of $1.2 trillion of wealth in about 120 seconds.

Some were convinced when they heard that America lost another 159,000 jobs last month.

REP. ZACH WAMP (R), Tennessee: Monday, I cast a blue-collar vote for the American people, shook the foundations of Wall Street, demanding more accountability. But today, I'm going to cast a red, white and blue-collar vote.

KWAME HOLMAN: Republican Zach Wamp said at home in Tennessee he was inundated with stories of businesses and families who couldn't get access to credit.

REP. ZACH WAMP: This is an awful place to be. This is a bad vote either way. It's real unpopular. But we don't have any choice. Next week could be really, really bad. I'm not willing to take that chance.

KWAME HOLMAN: Was anything lost by waiting these four days, Congressman?

REP. ZACH WAMP: No. As a matter of fact, you know, if we had another month, we could even do it better, but I don't think we have another month. I really don't.

I'm really worried sick about payrolls being met, unemployment reaching double digits, and I'm talking about in the next 30 days, because money is not moving.

Avoiding the 'price of inaction'

KWAME HOLMAN: Chicago Democrat Jesse Jackson, Jr., voted no on Monday, along with a dozen other members of the Congressional Black Caucus. He said talking to his party's standard bearer and fellow Chicagoan helped change his mind.

REP. JESSE JACKSON, JR. (D), Illinois: I talked with Sen. Barack Obama, who made it very clear to me that the cost and the price of inaction was too great to the nation. And he assured me of my chief concerns regarding basic individuals who more often than not during the course of this debate have been nameless and faceless.

KWAME HOLMAN: But Jackson said the House needed the four days since Monday to work its will.

REP. JESSE JACKSON, JR.: You heard the language begin to emerge, Wall Street versus Main Street, and then a fundamental change in the language after Monday's vote.

This is clearly about all of the streets of America, not just Wall Street, not just Main Street, but every single corner in America is profoundly affected by the inability to get credit, to buy a car, to pay your mortgage.

And so I think members of Congress got it, and I think they made a move in that direction.

The bill becomes law

KWAME HOLMAN: This afternoon, the rescue plan was approved with more than 40 votes to spare. Afterward, House Speaker Nancy Pelosi said the agenda of the next Congress likely will be full of efforts to help move a sagging economy.

REP. NANCY PELOSI (D-CA), Speaker of the House: It will be about accountability. It will be about regulation -- regulatory reform, which is essential.

And it will be about building an economy with a focus on the middle class, where many more Americans will participate in the economic security of Americans.

KWAME HOLMAN: For now, however, there was celebration. Democratic Leader Hoyer and Republican Whip Roy Blunt appeared together this afternoon.

REP. ROY BLUNT (R), Minority Whip: I was trying to decide if I got -- if I had a single day this week that my first telephone call wasn't either to or from the majority leader.

And so that's how I started my day every day this week. And as good of friends as we are, I'm hoping that next week -- next week that's not going to be the case.

KWAME HOLMAN: Republican Blunt said his members both liked the tax incentives and new banking measures added to the bill and recognized the urgent need to pass the bailout.

REP. ROY BLUNT: I think the members don't necessarily have to pay a political price for changing their vote, because the package did change and the circumstances did change.

KWAME HOLMAN: In a highly unusual step, Speaker Pelosi immediately signed the financial rescue legislation. Less than an hour later, President Bush signed it into law.

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